CHONGQING: Facts & Figures ¢¡ ¢¡ 䞡 ᑚ £¥¤ £¥¤ Chongqing always functions as the largest industrial and commercial center, and the traffic pivot at the upper reaches of the Yangtze River and southwestern China. Since it became the only municipality directly under the Central Government in West China in 1997, the economy of Chongqing has been soaring, and Chongqing has cultivated a sound investment environment, making Chongqing an ideal destination for domestic and overseas investors in West China. In March 2007, during the period of National People’s Congress and Chinese People’s Political Consultative Conference, General Secretary Hu Jintao attended the meeting of Chonqqing delegation and put forward that Chongqing will be built into an important growth pole in West China, an economic center in the region of the upper reach of Yangtze River and a municipality with development of urban and rural areas as a whole in an expedite manner so as to take the lead in achieving the target of establishment of moderately prosperous society in West China. In June 2007, approved by the State Council, the National Development and Reform Commission formally approved Chongqing as the national reform and experimental area of comprehensive complementation of rural and urban area as a whole, which is another significant strategic development opportunity for in its 10th year since it became a municipality directly under the Central Government. I. Economic Overview Broad Market Space The administrative area of Chongqing is 82,400 square kilometers and the population is 32 million. It has a vast local market and powerful radiation ability on the neighboring provinces and cities, covering a peripheral market with a population of 300 million. Dual Economic Structure The dual economic structure of the coexistence of big urban and rural areas makes Chongqing have not only modern industry and service but also the agriculture with abundant products, which provides extensive cooperation field and numerous business opportunities. Rapidly growing economy From 1997 to 2006, the annual average growth rate of GDP in Chongqing is more than 10% and the annual average growth rate of fixed assets is more than 20%, keeping a relatively long economic growth period. GDP in Chongqing in 2006 reached RMB 348.62 billion, up 12.2%; Investment on fixed assets of the whole society reached RMB 245.184 billion, up 24.9%; Total amount of export and import was US$ 5.47 billion, up 27.4%, including US$ 3.35 billion for export of foreign trade, up 33%; actual utilization of foreign capital valued US$ 700 million, up 34.9%. The export amount of foreign trade from January to April in 2007 reached US$ 1.23 billion, up 26.5% over the same period of last year, and the paid-up foreign capital valued US$ 190 million, up 37.6%. *URZWKRILQYHVWPHQWRQIL[HGDVVHW 7RWDODPRXQWRI LQYHVWPHQW &KRQJTLQJ %HLMLQJ 6KDQJKDL 7LDQMLQ Foreign investment: coming in a continuous stream Foreign relationship/presence Chongqing has established economic and trade relations with 180 countries and regions. Britain, Canada, Japan, Denmark and Cambodia have established consulates in Chongqing; Austria and Germany have established agencies of chambers of commerce in Chongqing. By the end of April 2007, the total number of foreign investment enterprises approved by Chongqing Municipal Government is up to 4,246. 71 of Fortune Top 500 enterprises including Ford, BP, Ericsson, ABB, Lafarge, Carrefour, Metro, Isuzu Motors and Suzuki Motor have established their presence in Chongqing. Sound Industrial Base Chongqing is one of the six old industrial bases in China. It has a sound industrial base, with a complete range of industries and strong supporting capacity. Industry is the dominant force in national economy in Chongqing. There are 100,000 industrial enterprises. In 2006, the industrial added value in Chongqing was RMB 123.4 billion, up 18%. At present, six large key industries in Chongqing have been formed and cultivated, i.e. automobiles and motorcycles, petroleum and natural gas chemistry, equipment manufacture, new materials, high-tech and labor-intensive industry. Gross Industrial Output Values in Chongqing (1997-2006) 3500 40.00% 3000 30.00% 2500 20.00% 2000 10.00% 1500 1000 0.00% 500 -10.00% 0 -20.00% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Gross Industrial Output Values(RMB 100 million) Growth Rate ——Auto Famous City in China The production capacity of automobiles of Chongqing ranks the third place in the country. The production and sales volume of all kinds of automobiles reaches 790,000 in 2006. The categories of automobiles are complete, including heavy trucks (represented by Hongyan Motor), light trucks (represented by Qingling light trucks), saloon cars (represented by Changan-Ford Motor and Changan- Suzuki Motor), passenger cars (represented by Chongqing Passenger Car Factory) and mini-type car (represented by Changan mini-type car). ——Capital of Motorcycle in China The annual production capacity of motorcycle in 2006 reached 7.5 million, ranking the first place in China. There are famous brands including Jialing, Jianshe, Longcin, Zongshen and Lifan. The export volume accounts for one third of the total export volume of Chinese motorcycles. ——Important City of Chemical Industry in China The chemical industry mainly includes natural gas and salt chemical. The main enterprises include Sinopec Sichuan Vinylon Works, and its joint venture with BP Yangtze River Acetyls Co., Ltd, Changshou Chemical Works, Agrochemical Group and Jianfeng Chemical Factory. Salt chemical enterprises mainly include Wanzhou Salt Group. It focuses on the development of these three industries including natural gas chemical industry, chlorine alkali chemical industry and petroleum chemical industry and forms six product chains including natural gas methanol, natural gas acetic acid, natural gas acetylene, chlorine alkali, fine chemical industry and new materials. Chongqing has become the natural gas chemical industry base with the largest scale, most complete categories of products and most advanced technology all over the country. The Yangtze River Acetyls Co., Ltd, invested by BP is the largest production base of acetic acid in West China. Chongqing will build the largest comprehensive chemical industry base and world-class natural gas chemical industry base at the upper reach of Yangtze River in the future. ——Processing Base of Aluminum Material in Asia Southwest Aluminum (Group) Co., Ltd. is a comprehensive and extra-large aluminum processing enterprise with largest production scale, most advanced technical equipment and most complete categories and specs in China, China’s aluminum materials base for aviation and spaceflight, production base of high and fine aluminum plate with foil, export and processing base of aluminum materials, with an annual production capacity of 400,000 tons of various aluminum profiles. II. Investment Advantages Enrichment of Favorable Policies Favorable policies in Chongqing are the superposition of national general favorable policies, favorable policies for West China and favorable policies for Three Gorges Reservoir Area. It has an obvious policy advantage. Industrial enterprises enjoy the favorable policy of 15% of the income tax for enterprises and the tax rate is 10 percentage points less than that in East and Central China; the income tax imposed on foreign enterprises can be exempted for two years and paid in half for three years since the year of making profit. In addition, when the number of migrants, lay-off workers or disables employed reaches a certain proportion, the enterprises can enjoy related favorable policies. There will be RMB 55 billion investment from national and local finance departments in the Three Gorges Reservoir Area in the future five years and favorable policies are accessible for the investment in the Three Gorges Reservoir Area. System of Municipality Directly under the Central Government The political and economic status of municipality directly under the Central Government is relatively high in China. It has approval jurisdiction at provincial level, so it has a few approval sectors and high working efficiency. Chongqing is one of the four municipalities directly under the Central Government in China and enjoys various administrative rights and legislative rights granted by the State to the municipality. It possess unique advantages of system of municipality directly under the Central Government in the aspects of policies. Advantages of Location and Traffic Chongqing is the only municipality directly under the Central Government in West China and located in the geometric center in the territory of mainland China. It is the combination part of economic developed area in East China and resources enrichment area in West China. It has location advantages of connecting of West, East, South and North China and has access to rivers and seas. It will be formed as the comprehensive traffic hub at the upper reach of Yangtze River. © © © © ¨ ¨ ¨¨ ¦¨§ © ¦¨§ © ¦¨§¦¨§ © © ዁ᱝ਄ਅਖ⠡ᚑ⧷ᢥ ,.- !#"!#" !#"!#" !#" 䭓ᳯਃⷺ $%'&( )+* / 偀᧪⷏Ѯ By 2010, 2,000 kilometers of expressway framework with “two circles and eight radiating lines” and 2,000 kilometers of railways with “one circle and nine radiating lines” will come into being. ⧷ᢥ D¥E.F :<;>=¥? I<Q 7 C 0.1 8¥9 R.S @BA G<H G<H 4¢5 4¢5 2+3 2+3 I¢J I¢J KML KML O.P O.P 6¢7 6¢7 9 9 N N R¢U.V>W T i<j.k b<cMd<e n.u }~ 3 }~ _ h }~ XBY XBY 8 `¢a v.w l.m l.m fBg \.] ZB[ \.] ZB[ n.o pMq sBt }~ 1 }~ ^B_ ^B_ a r x.v.y.z|{ }~ 5 }~ Chongqing is the shipping center at the upper reach of Yangtze River and the largest port linked to the sea in West China. By 2010, the throughput capacity of cargos in ports in Chongqing will reach 125 million tons, 1.6 million TEU of container and 760,000 vehicles of automobile Ro/Ro. Throughput capacity of the cargos of the ports will reach 120 million tons.